United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2005] UKVAT(Excise) E908, [2005] UKVAT(Excise) E00908

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Burrell v Revenue & Customs [2005] UKVAT(Excise) E00908 (12 September 2005)

EO00908

RESTORATION — ninth trip abroad — stopped at Gatwick — 800 grams hand rolling tobacco, 10,000 cigarettes — different brands on each occasion — refused to leave interview area for five hours — refusal to restore cigarettes and tobacco reasonable — dismissed

MANCHESTER TRIBUNAL CENTRE

KENNETH BURRELL Appellant

- and -

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: David S Porter (Chairman)

Elizabeth Pollard

Sitting in public in North Shields on 5 July 2005

The Appellant in person

Angela Philips, of counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

DECISION

Kenneth Burrell (the Appellant) appeals against the refusal contained in a letter from Customs of 22 December 2004 to restore to him 10,000 Lambert and Butler cigarettes and 800 grams of Domingo hand-rolling tobacco.

The Appellant appeared in person and Angela Philips appeared on behalf of Customs and produced a bundle to the tribunal.

We found the following facts. The Appellant is in receipt of a war pension, disability and mobility allowances amounting to approximately £1,200 per month. He does not have the best of health as he suffers from a heart condition and he has to take medication for his injuries. He returned from a five day holiday in Ibiza and he was asked to attend an interview as he collected his suitcases from the carousel. His suit case contained 10,000 Lambert and Butler cigarettes and 800 grams of Domingo hand-rolling tobacco. He smokes 60 cigarettes each day and the hand-rolling tobacco was for his son, one of nine children from 3 marriages. At the end of the interview at approximately 23:00 hours the Appellant refused to leave the premise until his goods were returned and eventually left at 05.30 when the shifts changed. The Appellant has been abroad on the following previous occasions:

January 1997: he brought in 2040 litres of beer, 5180 cigarettes and 25 Litres of spirit all of which were seized

December 1999: he brought in 2844 litres of beer which was seized together with the vehicle

August 2000: the Appellant refused to stop on a return from Luxembourg and 23,200 cigarettes were seized

August 2000: 31,000 cigarettes were seized form the Appellant on the A1 at Grantham when he was stopped for a motoring offence.

August 2000: 29,600 cigarettes were seized from him at Newcastle Airport

November 2003: he was again stopped at Newcastle Airport with 10,000 cigarettes but was allowed to keep them.

May 2004: he was stopped and Leeds and Bradford Airport with 5,600 cigarettes and 5 kilos of hand-rolling tobacco but was allowed to keep them

May 2004 on his return from Prague his goods were seized.

At the hearing the Appellant confirmed that he had been stopped at Boroughbridge in a mini bus he had hired to take disabled people abroad presumably to buy tobacco and beer. The bus and the goods were seized. He confirmed that he had reimbursed all the passengers for their loss and paid £1500 for the return of the 'bus.

The legislation is contained in The Excise Duties (Personal Reliefs) Order 1992 as amended at article 3 which states:-

"Subject to the provisions of this Order a community traveller entering the United Kingdom shall be relieved from the payment of any duty of excise on excise goods which he has obtained for his own use in the course of cross-border shopping and which he has transported"

"Own Use" is defined in the Order as:-

"Own Use" includes use as a personal gift provided that if the person making the gift receives in consequence any money or money's worth (including any reimbursements of expenses incurred in connection with obtaining the goods in question) his use shall not be regarded as own use for the purpose of this Order."

The Commissioners may require the person to satisfy them that the goods are not being held for commercial purposes.

Paragraph 2 of Article 9 of the Council Directive 92/12/EEC provides the criteria which must be taken into account in establishing whether or not the products are intended for commercial use: -

The commercial status of the person holding the products, and his reason for holding them

The place where the products are located or, if appropriate, the mode of transport used

Any documents relating to the products

The nature of the products

The quantity of the products

Miss Philips submitted, as a preliminary matter, that this Tribunal could not consider whether the goods have been purchased by the Appellant for his own use because there has been a deemed forfeiture arising from the Appellant' failure to bring condemnation proceedings. (See paragraph 5 schedule 3 of the Customs and Excise Management Act 1979). She referred to Barry Gasgoigne V (1) H M Customs and Excise (2) The Chairman of the VAT and Duties Tribunal 2004 EWCA C iv 1162, Gora v The Commissioners of Customs and Excise [2003] EWCA 525 as authorities for that contention. Gora at paragraphs 56-58 makes it clear that the Tribunal does not have the jurisdiction to reconsider the legality of the seizure. To do so would allow a party a choice of fact-finding Tribunals. In Gasgoigne whilst accepting that the findings in Gora were, "in technical terms … obiter" (paragraphs 42-43) the Court had the benefit of argument from leading Counsel on both sides. Buxton LJ observed that, in a deeming case under paragraph 5 schedule 3 of the Customs and Excise Management Act 1979, it may be open to a Tribunal to consider the grounds for seizure and forfeiture. However, this was subject to significant restrictions namely:

a. The Tribunal should first consider whether to allow such issues to be raised and re-determined would be an abuse of process (paragraph 55). This would depend on whether the appellant has had an opportunity to challenge the legality of the seizure such that, not to re-open that issue would infringe his right to a fair trial.

b. The normal English law rules of res judicata.

The Appellant had sought advice from Solicitors who should have been able to advise him of his right to request condemnation proceedings. As this had not been done it is not open to the Tribunal to consider whether the goods were purchased by the Appellant for their own use.

This point is consistently raised by Customs in the majority of similar cases. We do not accept that the Appellant cannot raise the issue as to the purchase of the goods for his own use. The advice given to Appellant by Customs at the time of the seizure and thereafter is far from clear. The Appellant will have been handed notice 12A, explaining the procedure. Notice 12A stresses the delay and inconvenience of condemnation proceedings without explaining the delay that will occur if there is a request for a review possibly followed by an appeal to the tribunal. He will also have received a letter from Customs asking him to clarify which appeal option he wished to pursue. The letter is far from clear. There are two choices. If an appellant believes that the items should not have been seized (that is that they had been bought for his own use) he can challenge the seizure. The process takes place in the Magistrates Court and he must raise the issue that he purchased the goods for his own use. The letter does not say which Magistrates Court but the cases are frequently heard in Dover. The request has to be made within one month of the seizure.

If an appellant accepts that Customs were legally entitled to seize the goods an appellant can write to the Post Seizure Unit and ask for the items to be restored. In the request for them to be restored. It is necessary to provide further evidence and detail of any exceptional circumstances as may exist to support restoration. The fact that an appellant thinks that the goods were purchased for his own use is by this stage irrelevant as the goods will have been deemed forfeit (See paragraph 5) If restoration is refused then an appellant can ask for a review by Customs. If the review upholds the forfeiture an appellant can appeal to the tribunal. As an alternative an appellant can pursue both of these remedies but Customs will not consider restoring the goods until the Magistrates Court have confirmed the validity of the seizure. An appellant is advised that if no reply is received then proceedings will be instigated without further notice. An appellant then has to indicate from the options at the end of the letter which cause he or she wishes to pursue:

Option 1 I confirm that I would like to request the restoration of my goods and/or the vehicle.

Option 2 I confirm that I would like to challenge the validity of the seizure. I am aware this will involve court proceedings.

It is unclear from the letter that an appellant can only allege that the goods were bought for his own use in the Magistrates Court. We are sure that the majority of appellants will say that they want their goods and vehicle back and they are likely to sign option 1. In so doing an application will not be made to the Magistrates Court. Once one month has passed from the seizure, the goods will be deemed forfeit and an appellant appears not to have the right to argue before this tribunal that he bought the goods for his own use.

Buxton LJ in Gasgoyne said:

"54 As it seems to me, for an importer to be completely shut out of the only tribunal before which he has in fact appeared from ventilating matters that are deemed to have been decided against him because of paragraph 5 of Schedule 3 does not adequately enable him to assert his convention rights.

55. In my view, therefore, in a case where the deeming provisions under paragraph 5 are applied, the tribunal can reopen these issues; though the tribunal will always have well in mind, considerations of, or similar to, abuse of process in considering whether such issues should in fact be ventilated before it."

The Appellant received advice from Ben Hoare and Bell Solicitors, Southwick and from a Law Centre. The advice was from trainee solicitors who appear not to have understood the ramifications of condemnation proceedings. In our view the only occasions in which it would not be open for an appellant to raise the issue of "own use" would be where either the case has been fully ventilated by him in the Magistrates Court, or an appellant had been advised of the Magistrates Court hearing and had chosen not to attend, with no good reason not to do so. Neither of these circumstances applies in this appeal.

In the present case we have therefore decided that the Appellant can raise the issue that they had purchased the goods for their own use.

Miss Philips submitted that the evidence given by the Appellant was not credible. The Appellant had been obstructive through out and he is fully aware of the procedures having been stopped on many previous occasions and had his goods seized by Customs.

The Appellant submitted that he had purchased the goods for his own use. The officer in charge had said to him that he had proved his point by staying as long as he did and the officer would make a note to that effect in his log. That was the only reason he left the premises and the officer had made no such note.

We have considered the facts and the submissions and have decided that the Customs' Review Officer acted reasonably in refusing to restore the goods and we dismiss the appeal.

The Appellant is not a well man and we doubt that he is able to smoke anything like the quantity of cigarettes he claims. He is very familiar with the procedures at customs. To our knowledge, the Appellant has been abroad on nine previous occasions since January 1997. He has been stopped by Customs each time and goods seized on six separate occasions. In addition he has been stopped by the Police for motoring offences, which have resulted in his goods being seized. In the circumstances we have no doubt that the Appellant purchased the goods with an intention to re-sell them and we dismiss the appeal.

Customs have not asked for any costs and we award none.

DAVID S PORTER

CHAIRMAN
Release Date: 12 September 2005

MAN/05/8005